‘Culture drives our company, not one person’
Ajay Piramal plans to step down from Shriram Capital (SCL), the holding company of the Shriram Group’s financial service business, where he has been chairman since 2014. Shriram Group founder R THYAGARAJAN speaks to T E Narasimhan in an interview. Edited excerpts:
Have you found a successor for Ajay Piramal?
He has said he intends to step down in due course. He has not done it yet and so there is no question of a successor right now.
The chairman is not all that key for day-today functions. Somebody can be a chairman for the board meeting — it is not very very essential all the time. We will look at it only if Piramal resigns from the board of directors. We will wait for some more time.
The position of a chairman is to guide, not exactly drive the company. Enterprises are driven by CEO teams. They are important. The board of directors reviews the performance of the management team and will intervene for changing the team.
In India, nobody has really understood what the role is of a director in a company.
Will you be looking at a successor internally or externally when Piramal does step down?
This is not an important position. Each company (under SCL) has its own board of directors and chairman. The operating companies, like Shiram Transport, Shriram City Union, life and general insurance firms, are important and have their own CEOS, boards and chairman. This (Shiram Capital) is only a holding company.
Because Piramal was involved in the whole group, we thought he will take an active role, which he was doing in the past few years. Now, he decides he will get out from the investments. As and when it happens, we will take a decision.
So, the holding company chairman stepping down will not impact the other companies?
It doesn’t make much of a difference in the immediate future. Actually, if you ask me, the boards of directors are not as important as the CEOS and their team. It is the CEO who takes the responsibility. It is his job which is at stake if he doesn't do well. The board and chairman are not half as important as the operating team. It is only in our country, which thinks about hierarchy, about who is above whom —there is no question of anybody being above anybody else.
Did you ask Piramal to stay back?
If he continues, we will be happy. If he is not continuing, we have also been running the company for 30 years. It will continue to be. Shriram Group is now almost 40 years old. A management culture has been created. Once you have a management culture, it cannot be changed overnight. Anybody sitting at the top is not going to make much of a change in the culture, except in the long run of five to 10 years. Therefore, Shriram Group's culture will drive it forward. In the past, people (CEOS) have moved from Shriram Group but nothing has changed.
Did Piramal bring positive change?
He understood it is a good culture and was supportive. I don’t think he wanted to change this. One or two things he tried to do and there were some benefits but I won’t say they were fundamentally culture-changing benefits. There were a few initiatives he introduced, which were okay.
What is the status of the merger (SCL plans to merge two of its listed units, Shriram Transport and Shriram City Union)?
No development; discussions are going on.
How many investors have shown interest to buy the Piramal and TPG stake in SCL? Did Sanlam (Shriram’s partner from South Africa) show interest?
No proposal from Sanlam. We heard three investors are shortlisted. The two shareholders (Piramal and TPG) want to exit and they appointed Morgan Stanley and Jpmorgan as investment bankers (for doing so). Today, the environment is such that people take their own time in making decisions.